Nedbank chief executive officer (CEO) Micheal Brown testified at the commission of inquiry into state capture on Wednesday giving reasons why the bank had decided in 2016 to close the accounts of Gupta associated entities and end its relationship with the controversial family.
Brown testified that the bank’s decision led to the institution being invited by the governing ANC to discuss the matter and a cabinet-organised inter-ministerial committee established to probe the impact the decision would have.
The four banks; Standard Bank, FNB, ABSA, and Nedbank; took the decision to close the accounts of Gupta-linked entities due to reputational and business risks.
When Brown left the meeting with the ANC attended by former secretary general Gwede Mantashe, Jessie Duarte, and possibly by the party’s Enoch Godongwana, he said he did not feel pressured for the bank to reverse its decision on the closure of the accounts.
However, he said the meeting with the inter-ministerial committee gave him the impression that there was some pressure on the bank to become the primary transactional banker for Gupta-linked entities as a way of saving thousands of jobs.
Nedbank closed the accounts of Gupta-linked entities Oakbay Investments, Islandsite Investments, and Sahara Computers, among others.
Brown said following the decision to close the accounts, the bank met with Oakbay CEO Nazeem Howa who requested the bank review its decision and at a later stage with the governing party at its Luthuli House headquarters.
Brown said the bank was invited to meet with the inter-ministerial committee in May 2016, an invitation which did not include a set agenda for the meeting.
He said he was informed the committee would include former minister of mineral resources Mosebenzi Zwane, former minister of finance Pravin Gordhan, former minister of labour Mildred Oliphant, and former communications minister Faith Muthambi.
The meeting was apparently chaired by Zwane and held at the minister’s offices in Pretoria; however, Oliphant, Gordhan, and Muthambi had not attended the meeting.
Brown said he was assured by Zwane that Gordhan knew about the meeting.
Zwane opened the meeting by stating the committee did not represent any company or family but had been established to seek resolutions to the thousands of jobs that would be lost following the closure of the Gupta accounts, among others.
According to Brown, questions posed by Zwane and other members who were of or represented the committee members focused on the Gupta associated accounts. Zwane also apparently suggested that Nedbank should consider stepping in and becoming the primary transactional banker for the Gupta entities in an effort to save jobs.
“I certainly left the meeting with the impression that the good outcome for the IMC [inter-ministerial committee] would be to take over the transactional facilities of the Gupta family,” Brown said
A combination of references to the licensing regime and subtext referencing the bank’s license as well as the suggestion posed by Zwane left Brown with the sense that the committee sought to coerce the bank into reversing its decision.